Do you dread negotiating? Relax. You don't have to haggle if you don't want to. The idea is to find an approach you are comfortable with -- it may well be the no-haggle, take-it-or-leave-it approach that many buyers successfully employ.
But no matter how you decide to negotiate, never feel you must commit to a deal if you're uncomfortable. Walk away and give yourself time to think, free of any pressure. In fact, walking away from a deal can be a powerful way to get better terms.
Job number one is to establish a fair purchase price. Don't discuss financing at all, either via fax, over the phone or in person. Make it clear that you won't talk about payments or financing until after you settle on a fair price. Should the dealer learn that you are desperate for a lease or a loan, your bargaining power will be severely damaged, and you will overpay for the car. Should you fail to first negotiate a set price, the dealer will sell you "affordable" monthly payments that will continue far longer than they should.
In addition, don't let the salesperson know your financing limit. According to car-buying expert Grady Cash, author of Conquer the 7 Deadly Money Mistakes, the salesperson will try to price the car so as to hit that limit. If they ask about your financing limit, indicate that financing isn't a problem. Say, "Let's get back to discussing the purchase price."
In person:
Visit a dealer but don't make an offer, counsels Cash. Ask for the dealer's "out-the-door" price -- this is the price that includes sales tax plus all fees and charges. Compare it with other quotes you may have received, and the target price you've calculated. If necessary, continue the negotiation in person or, better yet, by fax or phone.
By phone
Negotiating by phone is "much easier than sitting through an hour of sales hype," according to Cash. Find area dealers in the phone book. Ask for the sales manager.
Cash recommends you say something like, I'm willing to pay $15,000 for that car and not a nickel more. If that's okay, I can be there in a half-hour with a certified check. "They'll either say yes, no or make a counteroffer," Cash says. "No matter what, you're in control." Another approach he suggests: Ask the dealer to beat the "no-haggle" (Web-based) price quote by $500, otherwise you'll buy from the "no-haggle" dealer.
By fax
Car-buying service Fighting Chance strongly recommends what they call the fax attack, in which you use the fax machine to pit numerous dealers against one another in a bidding contest for your business. Call area dealerships and ask each for the fax number and name of their sales manager. Fax the sales managers a description of the car model you want, and ask that they respond with their best price quote. Then fax the dealers again to see who will beat the lowest quote from round one. This can be an especially effective approach if you hate face-to-face negotiations or otherwise worry that you won't get the best available price.
No-haggle
Web-based dealer referral services and true no-haggle dealerships such as Saturn and Daewoo eliminate the anxiety associated with dithering over price, but in exchange for a "stress-free" buying experience, you will pay more than you need to for a car -- full sticker price for a Saturn, for example.
Most of the car-buying Websites bill themselves as "no-haggle" sites, and simply arrange for an affiliated dealer in your area to contact you with a "no haggle" price quote -- convenient, yes, but not necessarily the best possible price. (Truth is, you can often negotiate with those dealers!)
Another approach if you really hate haggling or don't care to take on the dealers yourself: consider one of the consumer-friendly car buying services.
TIP: YOUR TIME IS MONEY, so figure it in: if you're worth $20 an hour after taxes, and it'll take 15 hours of extra pricing research, dealer visits and negotiations, a no-haggle approach could be worth $300 to you.
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